Magna Hospitality signs $105M refi with Wells Fargo for hotel in Chelsea

Magna Hospitality Group through the entity Chelsea 24th Street LLC as borrower signed a refi loan with lender Wells Fargo valued at $105 million for the hotel building (H2) at 113-117 West 24th Street in Chelsea, Manhattan.
The deal closed on October 17, 2024 and was recorded on October 22, 2024. The prior lender was Wells Fargo which held debt that had an original loan amount of $78.7 million.
The property has 154,812 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $678 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The owner bought the property on October 17, 2019, for $74.2 million. The signatory for Magna Hospitality Group was Douglas Stevens. The signatory for Wells Fargo was Matthew Kacheris.

The property

The hotel building in Chelsea has 154,812 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 75 feet and is 94 feet deep with a total lot size of 7,112 square feet. The zoning is M1-6 which allows for up to 10 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $37.6 million. The most recent loan totaled $62.5 million and was provided by Wells Fargo on October 17, 2019.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received $3,225 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on January 16, 2020. On the lot, there are two active new building construction projects and major alteration projects with initial costs more than $5 million, totaling 268,467 square feet. The largest, 121187214, is a new building project for a 341-unit, 141,734 square-foot R-1 building submitted by Lam Generation and filed by Jeffrey Lam with plans filed September 17, 2014 and permitted February 3, 2016. The second largest, 121204598, is a new building project for a 375-unit, 126,733 square-foot R-1 building submitted by Sal Aquilato with plans filed February 14, 2018 and permitted July 29, 2020.

The neighborhood

In Chelsea, The bulk, or 35 percent of the 52.5 million square feet of commercial built space are office buildings, with elevator buildings next occupying 28 percent of the space. In sales, Chelsea has the 7th highest sale turnover among other neighborhoods in the city with $1.1 billion in sales volume in the last two years. For development, Chelsea has 1.7 times the average amount of major developments relative to other neighborhoods and is the 19th highest in Manhattan. It had 1.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 12 of the 25 commercial properties representing 731,084 square feet of the 1,107,133 square feet. The largest owner is Lam Generation, followed by Edison Properties and then Magna Hospitality Group.
On the tax block, there were five new building construction projects totaling 329,947 square feet. The largest is a 341-unit, 141,734 square-foot hotel/dormitory/shelter (R-1) building submitted by Lam Generation and filed by Jeffrey Lam with plans filed September 17, 2014 and permitted February 3, 2016. The second largest is a 375-unit, 126,733 square-foot hotel/dormitory/shelter (R-1) building submitted by Sal Aquilato with plans filed February 14, 2018 and permitted July 29, 2020.

The majority, or 49 percent of the 1.1 million square feet of built space are office buildings, with hotel buildings next occupying 36 percent of the space.

The borrower

The PincusCo database currently indicates that Magna Hospitality Group owned at least six commercial properties in New York City with 932,143 square feet and a city-determined market value of $338.4 million. (Market value is typically about 50% of actual value.) The portfolio has $797.4 million in debt, with top three lenders as PIMCO, Blackstone Group, and Apollo Global Management respectively. Within the portfolio, all identified are hotel properties. They are all located in Manhattan.

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